What Happens After Your Lawyer Sends a Demand Letter?

What Happens After Your Lawyer Sends a Demand Letter? >

Demand letter noting that someone needs to make payment before legal action occurs.

In personal injury cases, sending a demand letter to the insurance company is the way to initiate settlement negotiations. Their response will let your lawyer know whether additional negotiations might result in a settlement or a trial might be required to get the compensation you deserve.

What Is a Demand Letter?

A demand letter is a letter to the opposing party stating your position, outlining why the at-fault party should be responsible for your accident-related injuries and losses, and demanding payment to resolve the case outside the court system. This correspondence will provide the insurance company with background information supporting the amount you demand. The letters may also inform the other side that a lawsuit will be filed if a resolution is not negotiated.

How to Prepare a Demand Letter

The more facts and details you provide in a demand letter, the more likely the case will settle before a formal cause of action needs to be filed. Your letter should contain:

  • Outline of the facts of the accident
  • Description of evidence proving fault
  • Description of medical treatment
  • Description of the injury’s effect on your life
  • Amount of money demanded in settlement
  • Deadline for a response from the insurance company

How Long After a Demand Letter Can I Expect Settlement?

Once a demand letter is sent, the length of time someone has to wait for the issue to be settled depends on the parties and the compensation sought. Various outcomes may occur once the opposing party receives the demand letter, including:

  • They meet the demand
  • They make a counteroffer
  • They refuse the demand 

Meeting The Demand

The best-case scenario that will result in the least amount of money spent and time waiting for compensation is that the insurance company meets the demand. Under this scenario, the insurance company will agree to the demands and prepare a settlement agreement to resolve the case.

Making a Counteroffer to a Demand Letter

In some circumstances, the opposing party will make a counteroffer to a demand letter. They disagree with the amount you’ve demanded but are willing to negotiate to settle the matter outside of the court system. A counteroffer is not an assurance that they will settle. An experienced attorney will review the counteroffer and give suggestions on how best to handle the situation moving forward.

Refusing the Demand

In some cases, the party receiving the demand letter may reject the demand outright. If this occurs, it may be necessary to file a lawsuit to receive the compensation sought.

No laws govern how long someone has to respond to a demand letter. Even though your letter will include a response date, the insurance company may not meet your deadline. However, even if they agree that you have a valid claim and agree to your settlement, you will generally have to wait a few weeks or months for a settlement check.

What Factors Affect How Long It Takes the Insurance Company to Respond to a Demand Letter?

Several factors can affect how quickly a demand letter is answered, including:

  • Whether there is a history of communication between two parties.  For example, if an attorney has a history of communication with a specific insurance company, the insurance company may be inclined to respond slightly faster than if it was sent from an individual.
  • The amount being sought. For example, if someone is seeking $50,000 worth of compensation, the insurance company’s investigation will take longer than a $5,000 claim investigation.
  • The insurance company’s efficiency. If the insurance company has a large staff that is efficient at investigating cases and an adjuster on top of their files, the response to the demand letter will likely be timelier than if the insurance company is understaffed or has newer workers unsure of company procedures.

Contact Brach Eichler Injury Lawyers Today

When preparing a demand letter, an experienced attorney will understand what to include and what will bog down the demand letter. At Brach Eichler Injury Lawyers, our team has received ratings and rewards from the following organizations: America’s Top 100 Personal Injury Attorneys, The Best Lawyers in America, and Super Lawyers.

Our attorneys will zealously advocate for you and fight for the maximum possible compensation you deserve. If you have been injured due to someone’s negligence and seek compensation, call the New Jersey personal injury lawyers of Brach Eichler Injury Lawyers at (973) 364-8300 for a free consultation.

Written by: Brach Eichler Injury Lawyers Last Updated : August 25, 2023
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